China Netcom's rumored purchase of PCCW (0008.HK) is heating up in local media reports. Analysts say China Netcom will spend $844 Million to buy 20% of PCCW, a move thought to be able to help lessen the latter's debt and offer China Netcom an opportunity to enter the fixed phone market of Hong Kong.

A source close to the negotiations has reported in press accounts that a common understanding is expected to be reached between the two parties within weeks.

However, if the acquisition is successful, China Netcom will become the second largest shareholder of the PCCW.